Axis Bank kicks off share sale to mop up Rs 5,546 crore

MUMBAI: Axis Bank, the country's third-biggest private bank, began a share sale on Monday at a 1.8% discount to the market price, which will help it raise Rs 5,546 crore, said a banker familiar with the sale.

The share sale, comprising 3.44 crore shares to institutions and 59 lakh shares to existing shareholders, will be at Rs 1,390 a piece, said the person preferring anonymity.

Axis joins the rush from banks to raise equity funds as the regulator prepares to implement tough capital norms, popularly known as Basel III norms, framed by global central bankers to prevent a repeat of 2008 financial crisis. IndusInd Bank, Development Credit Bank and City Union Bank were the other lenders which raised equity capital.

The share sale by Axis will lead to an equity dilution of 10.75%. Axis' so called Tier-I capital, i.e. equity, is at 10.27%, compared with 7% prescribed by Basel III norms.